The Organization for Economic Cooperation and Development global economy outlook released Wednesday said growth will slow in 2024 as inflation recedes. OECD Secretary General Mathias Cormann (R) said the global economy continues to face both low growth and elevated inflation. Photo by Ian Langsdon/EPA-EFE
Nov. 29 (UPI) -- Global economic growth is expected to slow in 2024 as inflation continues to decline, according to a Wednesday outlook from the Organization for Economic Cooperation and Development.
The OECD said in a statement, "The Outlook projects global GDP growth of 2.9% in 2023, followed by a mild slowdown to 2.7% in 2024 and a slight improvement to 3.0% in 2025. Asia is expected to continue to account for the bulk of global growth in 2024-25, as it has in 2023."
The organization said U.S. GDP growth is projected to be 2.4% for 2023, but will slow to 1.5% in 2024 and tick up to 1.7% in 2025.
"The global economy continues to confront the challenges of both low growth and elevated inflation, with a mild slowdown next year, mainly as a result of the necessary monetary policy tightening over the past two years," OECD Secretary-General Mathias Cormann said in a statement. "Inflation has declined from last year's peaks. We expect that inflation will be back at central bank targets by 2025 in most economies."
One reason for the slowing growth, according to the OECD, is the impact of tight money policies designed to lower inflation. Those policies are impacting both economic growth and inflation numbers.
"Consumer price inflation in OECD countries is expected to decline from 7% in 2023 to 5.2% in 2024 and 3.8% in 2025," the OECD statement said.
The OECD economic outlook projection said governments are facing high public debt to GDP ratios as multiple sources, including the need to tackle climate change, exert fiscal pressures.
Fiscal policy needs to prevent unsustainable debt increases, according to the OECD outlook.
"Governments really need to start confronting the mounting challenges that public finances face, particularly from aging populations and climate change," OECD Chief Economist Clare Lombardelli said in a statement. "Governments need to spend smarter, and policy makers need to contain current and future fiscal pressures while preserving investment and rebuilding buffers to respond to future shocks."
Unless governments take action, OECD said, the level of public debt to GDP will keep increasing to high levels.